Latest COVID-19 News for Employers: Unemployment Insurance

As many businesses face office/facility closures due to state orders or responsible social distancing, employees will be wondering how to replace lost income due to these factors.

For California employers, Gov. Gavin Newsom recently issued an executive order to waive the one-week unpaid waiting periods, so the employee can collect Unemployment Insurance (UI) benefits for the first week they are out of work.  Additionally, UI eligibility has been expanded to address this unprecedented time, and below are a few examples of the expanded eligibility rules.  You can find more info by clicking here.

  •  If your child’s school is closed, and you have to miss work to be there for them, you may be eligible for Unemployment Insurance benefits. Eligibility considerations include if you have no other care options and if you are unable to continue working your normal hours remotely. File an Unemployment Insurance claim and our EDD representatives will decide if you are eligible.
  • If your employer has reduced your hours or shut down operations due to COVID-19, you can file an Unemployment Insurance (UI) claim. UI provides partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own. Workers who are temporarily unemployed due to COVID-19 and expected to return to work with their employer within a few weeks are not required to actively seek work each week. However, they must remain able and available and ready to work during their unemployment for each week of benefits claimed and meet all other eligibility criteria. Eligible individuals can receive benefits that range from $40-$450 per week.

For those employers operating with locations or employees nationally, it’s important to refer to each individual state requirement.  Bobbi Kloss, Director of Human Capital Management Services, at BAN expands here: 

With many businesses being faced with mandatory State orders to temporarily close or scale back their services in an ability to minimize the spread of the Coronavirus (COVID-19), workers are being displaced. Turning to the unemployment lines, employees are questioning their employers about their potential eligibility for Unemployment Insurance (UI) benefits. While the determination of eligibility is based upon many determining factors such as length of employment, wages earned over a given period of time and reason for separation, an employer is not in the position nor should not attempt to make that determination.

Concerned employers though can be aware that the U. S. Department of Labor (DOL) on March 12 issued guidance permitting States “significant flexibility” in amending the guidelines for which an employee may receive benefits due to the effects of COVID-19.  “Clarifying the flexibility in which a person may be eligible for unemployment insurance benefits during the coronavirus outbreak will ease financial burdens for those workers affected by the virus” said Assistant Secretary for the Employment and Training Administration John Pallasch.

This DOL guidance provides that UI benefits may be available for employees:

(1) When an employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;

(2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and

(3) An individual leaves employment due to a risk of exposure or infection or to care for a family member.

In addition:

  • Federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19, and
  • If an employee on leave is receiving payment for their leave, the employee is not deemed unemployed and therefore not eligible for unemployment insurance.

Information regarding eligibility for benefits and how benefits will be treated for charging an employer’s UI account for benefits paid out, is changing day to day and is different state to state.  It is important that employers refer to their individual state unemployment office for guidance, a listing of which is provided here as well as refer their employees to their local UI office for the latest information regarding eligibility.

About Michelle Cammayo, Compliance National Practice Leader, Employee Benefits

Michelle Cammayo has close to 20 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She is also the IMA National Practice Leader for Compliance and endeavors to ensure IMA helps its clients manage and eliminate risk in the most effective manner. She is passionate about educating others and her passion for this shined in the COVID era where Michelle conducted weekly and then monthly webinars providing guidance to employers. Her podcast, Cammayo’s Compliance Talk, has gained popularity in the last three years to become a favorite amongst our clients. She also contributes regularly to our Blog and has authored several articles for industry-related newsletters. Michelle’s consultative approach with employers provides practical advice as employers endeavor to be compliant.

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